Monday, August 31, 2015

Paul Craig Roberts -- The Dying Institutions Of Western Civilization

The US no longer has a
judiciary. This former branch of government has transitioned into an enabler of
executive branch fascism.

Privacy is a civil liberty
protected by the US Constitution. The Constitution relies on courts to enforce
its prohibitions against intrusive government, but if the executive branch
claims (no proof required) “national security,” courts kiss the Constitution
good-bye.

Federal judges are chosen
by the executive branch. The senate can refuse to confirm, but that is rare.
The executive branch chooses judges who are friendly to executive power. This
is especially the case for the appeals courts and the Supreme Court. The
Justice (sic) Department keeps tabs on district court judges who rule against
the government, and these judges don’t make it to the higher courts. The result
over time is to erode civil liberty.

Recently a three-judge
panel of the US Appeals Court for the District of Columbia ruled that the
National Security Agency can continue its mass surveillance of the US
population without showing cause. The panel avoided the constitutional question
by ruling on procedural terms that NSA had a right to withhold the information
that would prove the plaintiffs’ case.

By refusing to extend the
section of the USA PATRIOT Act—a name that puts a patriotic sheen on Orwellian
totalitarianism—that gave carte blanche to the NSA and by passing the USA
Freedom Act, Congress attempted to give NSA’s spying a constitutional patina.
The USA Freedom Act allows the telecom companies to spy on us and collect all
of our communications data and for NSA to access the data by obtaining a
warrant from the Foreign Intelligence Surveillance Act (FISA) Court. The
Freedom Act protects constitutional procedures by requiring NSA to go through
the motions, but it does not prevent telecom companies from invading our
privacy in behalf of NSA.

No one has ever explained
the supposed threat that American citizens pose to themselves that requires all
of their communications to be collected and stored by Big Brother. If the US
Constitution was respected by the executive branch, Congress, the judiciary,
law schools and bar associations, there would have been a public discussion
about whether Americans are most threatened by the supposed threat that
requires universal surveillance or by the loss of their constitutional
protections. We all know what our Founding Fathers’ answer would be.

Florida
Government Defies Voters, Misuses Earmarked Funds

By allocating funds set
aside by law for the purchase of land and wildlife habitat to other purposes,
Florida Republicans have negated the Water and Land Conservation Amendment that
Floridians passed with a 75% majority last November. The amendment requires
that one-third of the funds produced by real estate stamp taxes be used for
conservation purposes.

Conservation runs counter
to the interests of real estate developers and polluters who have done so much
to destroy Florida’s unique environment. Real estate developers and polluters
are major Republican contributors.

Faced with the people’s
will, the Republican government is claiming that proper uses of the fund are to
pay salaries for the Florida Department of Agriculture and Consumer Services,
to teach best management practices for privately owned lands, and to pay
private agricultural operations to retain the pollution that results from their
operations on their own property.

In typical Republican
fashion, money legally mandated for purchasing public land is being used to pay
state salaries and to make payments to private land owners. This is a good
indication of the scant respect that American democracy has for the will of the
people.

A
Robot Will Take Your Job

Several recent studies
conclude that robots are going to displace millions of human workers. An Oxford
University study found that 47 percent of jobs are at risk. Another study
concludes that one third of all jobs will be lost to robots during the next 10 years.
Some claim that the net job loss will not be so large, because new jobs will be
created in order to repair the robots, at least until robots learn to do this
also.

Perhaps you remember the
claims by economists Matthew Slaughter, Michael Porter, and other shills for
jobs offshoring that moving American jobs offshore would create better and more
jobs in the US. After many years I am still watching for any sign of these
promised new jobs.

Despite promises to the
contrary, the US economy has been halted in its tracks by jobs offshoring. US
corporations have moved middle class manufacturing jobs abroad. The high speed
Internet has made it possible for tradable professional skills, such as
software engineering, information technology, research, design, and scan
interpretations by medical doctors, to be performed offshore. This enormous
giveaway of American middle class jobs and GDP to foreign countries has left
the domestic economy with non-tradable service jobs.

Robotics is now attacking
the remaining domestic service jobs. Robots are becoming sales assistants,
providing room service to hotel guests, filling orders at delis, providing
medical diagnosis, cooking and serving meals, and becoming incorporated into
smart household appliances that reduce the need for electrical and repair
services. All of us are familiar with customer service robots. We encounter
them whenever we telephone about a bank or credit card statement or utility
bill.

The unaddressed problem is:
what happens to consumer demand, on which the economy depends, when humans are
replaced by robots? Robots don’t need a paycheck in order to purchase food,
clothes, shoes, entertainment, health care, go on vacations, or to make car,
utility, credit card, rent or mortgage payments. The consumer economy has
suffered from incomes lost to jobs offshoring. If robots replace yet more
Americans, where does the income come from to purchase the products of the
robots’ work? Any one firm’s owners and managers can benefit from lowering
costs by replacing a human workforce with robots, but all firms cannot. If all
firms replace their work forces with robots, the rate of unemployment becomes
astronomical, and consumer demand collapses pulling down the economy.

Economists call what works
in the singular but not in the plural the fallacy of composition. Keynesian
macroeconomists teach that if everyone in society is thrifty with the
consequence that savers save more than investors want to invest, aggregate
demand falls, and with it incomes and savings. Thus, by trying to save more,
savers end up with less.

With the advent of jobs
offshoring and financial deregulation, the US has one of the most unequal
distributions of income and wealth. As robotics patents are held by a mere
handful of people, the concentration of income and wealth at the top will
increase.

What kind of society would
result? Will governments nationalize robotics or heavily tax the incomes of
owners in order to issue monthly payments to people with which to purchase the
work product of robots? What would a population living off the work of robots
do with itself? Would population growth be tolerated? Or would the powerful
owners of robotics use the governments that they control to reduce the surplus
population?

Free market economists with
their heads forever in the sand will say, “No worry, people thought that the
industrial revolution would destroy the demand for labor, but industry employed
ever more people.” A former MIT professor who has gone into business producing
robots says robots will bring the jobs lost to offshoring home to America. But
will they be jobs for humans or for robots? I am waiting to hear how robotics
will expand the demand for human labor beyond a few repairmen to fix robots.
And I am still waiting for the new and better jobs that offshoring promised. By
the time they get here, if ever, robots will take them away.

Stock
Market Supported By Corporate Buybacks

Pension funds purchase
corporate bonds, and the corporations use the money to buy back their own
stocks, thus driving up the price, enriching executives with bonuses and
shareholders with capital gains, but leaving the company in debt. One study
found that last year 95 percent of all corporate earnings were used either to
pay dividends or to buy back the company’s stock. Read Mike Whitney’s report in
CounterPunch:

The presence of The White
Lady, a four-masted Chilean sailing ship, at the Tall Ships Festival in England
is being protested. Protestors believe the ship is guilty of human rights
violations as the ship was allegedly the site of torture inflicted by the Pinochet
government as it put down the terrorism that followed the overthrow of the
Allende government. Just
as guns murder, ships torture.

The torture alleged to have
occurred aboard The White Lady sounds like a small town performance of the
torture sanctioned by Washington and London at Abu Ghraib, Guantanamo, and
numerous secret sites. How are the American and British democracies superior to
Chilean military dictatorship if the former out-tortures the latter? To my
knowledge, the Pinochet regime, unlike the Bush regime, never had John Yoo
write a legal memo making torture legal. This is probably why, prior to
stepping down and returning Chile to constitutional democracy, Pinochet issued
pardons both to the military government and to the terrorists.

Demand
for Silver Outstripping Supply But Price Is Falling
On numerous occasions Dave Kranzler and I have pointed out that despite high
and rising demand for physical bullion and constrained supply, the prices of
gold and silver are forced down by concerted manipulation in the futures
market. Silver supplies are so tight that both the US and Canadian mints have
had to suspend the production and sale of silver coins. Despite supply
constraints, in the manipulated futures market the price of silver has been
falling, but in the physical market the price of silver coins has risen with
premiums over spot raising coin prices as much as 30 percent. Regulatory
authorities have brought no action against the obvious manipulation in the
futures market.

It is important to the value
of the fiat currencies that are being printed in profusion that gold and silver
be discredited as hedges against currency depreciation. Thus, authorities turn
a blind eye to the obvious manipulation, the purpose of which is to show that
inflating fiat paper currencies are gaining in value relative to gold and
silver.

I am awaiting the
explanation from the Commodity Futures Trading Commission (CFTC) why it is
normal for inflating fiat currencies to gain value in relation to gold and
silver bullion. Kranzler and I, supported by individuals thoroughly acquainted
with the bullion market, have written to the CFTC asking how it is possible for
price to fall when demand is rising and supply is constrained.

We will see if a former
Assistant Secretary of the US Treasury can get an answer.

Good-bye
To Cash

If all this isn’t enough,
government now wants to deprive us of cash in order to deprive us of private
and unreported payments and savings. The Financial Times, Britain’s equivalent
to the Wall Street Journal, has published an anonymous article advocating that
cash be abolished and all transactions be digital so that authorities can know
and completely control our behavior. Clearly a big push in this direction is in
the works. If the authorities succeed, we will have a situation in which the
privacy guaranteed by the US Constitution becomes a myth that slowly fades from
memory.